Date extension the only solution for GST annual return & GST audit

The GST annual return & GST audit report for the first year, which is 2017-18, had to be submitted before December 31, 2018, but saw three extensions - March 31, 2019, June 30, 2019 and finally August 31, 2019. However looking at the recent statistics released by the authorities it is observed that only 20 % of annual returns and less than 2 % of the audit reports have been furnished.

Further tax officials have warned of severe consequences and heavy penalty if same are not filed in time. In the next 10 days it is expected that pending 98 % of the audit reports have to be furnished and balance 80 % of Annual Returns have to be furnished. The last dates normally see an increase in numbers, but is it really feasible to achieve such a drastic number?

One must accept the fact that the said delays are not due to lethargy or non-compliance of the tax payers. There are various clarifications, interpretations and technical issues involved. The clarificatory circulars were issued on 04.06.2019 and 03.07.2019. The said circulars cannot be interpreted in such a short span. The tax payer needs some time to revisit the various stands taken by them before the circulars were issued and its impact on them.

Further there are interpretational issues in light of various Writ Petitions and Advance Rulings which need to be considered by the tax payers. Technically the tax payers are facing issues of uploading the documents, json files, versions changing from time to time, digital signatures not being recognized, error reports not being generated. There has to be a proper technical cell to assist the taxpayers to resolve their technical issues.

Even the CAG in its recent report has categorically stated that “One significant area where the full potential of GST (Goods and Services tax) has not been achieved is the roll out of the simplified tax compliance regime." CAG also said there were deficiencies in the GST system, indicating a “serious lack of coordination between the executive and the developers."

The authorities must appreciate the fact that GST annual returns 9, 9A and 9C for 2017-18 were available online in March, 2019 and offline in April, 2019. The very fact that the status of return filings is low should indicate that the trade and industry is facing genuine problems and hardships in the matter. Most of the trade and consultants have been burning the midnight oil and spending weekends in the office to ensure compliance.

Hence, adequate time needs to be given for compiling the details to ensure qualitative filing of information. Submission of improper reports, wrong reconciliations, wrong data etc will render the entire exercise of submission of annual return and GST audit report futile. It will not give the desired results and will also not be helpful to the authorities.

Considering the numerous problems and issues faced by the trade and professionals, it is the need of the hour to postpone the due date for filing Annual Returns and GST Audit Reports for the fiscal year ended March 2018 to November 30, 2019 and for year ended March 2019 to March 31, 2020. Further as most of the taxpayers have already discharged their GST liabilities for year ended March 2018 and 2019, postponing the due dates for annual return & GST audit will not impact the revenue of the government. #casansaar (Source - Economic Times)